Clinton Urges Full China Trade Ties

President Clinton said in an interview Friday that he now supports granting most-favored-nation trade status to China on a permanent basis, abolishing the decades-old requirement that Beijing’s trade benefits be submitted to Congress for approval each year.

“I think it would be a good thing if we didn’t have to have this debate [in Congress over China’s trade benefits] every year,” the president said as he prepared for his first visit to China next week. “I don’t think this debate every year serves a particularly useful purpose.”

He suggested that after he comes home from China, he may propose legislation--long sought by the U.S. business community and by the Beijing regime--to extend China’s normal trade status indefinitely. Such legislation would be sure to encounter stiff opposition from many Republicans and human rights advocates in the Democratic Party.

In an Oval Office interview with The Times and two other news organizations, Clinton also sought to reassure Japan that his administration’s Asia policy is not skewed toward Beijing. The president said his decision to stop only in China, without visiting Japan or any other country on his upcoming trip across the Pacific, “is in no way a derogation of the Japanese relationship.”

The “most-favored-nation” benefit is the technical term for normal trade status. A country with this status can export its goods to the United States at the same low tariff rates as most other nations.

China has enjoyed these benefits since 1980. But it still remains subject to a law that requires all Communist countries to obtain annual renewals of the trade status. Under this provision, the president must recommend an extension of benefits each year, which takes effect unless Congress overrules him.

Human rights officials said this was the first time Clinton has called for granting permanent most-favored-nation status to China. “The administration knows that the [congressional] debate this year will be about the summit and whether Clinton achieved anything,” said Mike Jendrzejczyk, Washington director of Human Rights Watch / Asia. He said the required annual renewal of China’s trade benefits “is one of the few levers remaining [in dealing with China] that the administration hasn’t jettisoned.”

A move to extend China’s trade privileges indefinitely would mark the final step in the transformation of Clinton’s policy on this topic. During his 1992 presidential campaign, he attacked the Bush administration for routinely extending China’s trade benefits each year. Clinton said then that the United States should impose conditions on China’s trade benefits, refusing to renew them unless China made progress on human rights.

Clinton tried this approach in his first year in office but backed away in 1994 after China refused to meet the human rights conditions he had set. Since then, his administration has fought bruising political battles to secure annual renewals of China’s trade benefits but has refrained from asking that they be made permanent.

The president disclosed in the interview that he had talked privately to congressional leaders last year about ending the yearly struggles over China’s trade status. But Clinton said he backed off when he was told “it wasn’t the right time.”

Clinton recently announced that he has decided to renew China’s most-favored-nation trade benefits for another year. That decision is now pending in Congress, which is expected to act on it within the next few weeks.

Over the past month, Republican leaders in Congress have criticized Clinton for traveling to China and have urged him to postpone his trip at least until he can clear up questions about Chinese campaign contributions to the Democrats in 1996 and about American exports of satellites to China.

On Friday, Clinton asserted that some of the Republican criticisms of his China policy “may just be election year politics”--though he admitted that other Republicans have been consistent over the years in opposing a policy of engagement with Beijing.

Asked how his current approach to dealing with China differed from the Bush administration’s, Clinton insisted that his 1992 campaign position had been misunderstood.

“Some people I think concluded . . . that I thought we ought to, in effect, launch a policy of isolation [of China] and that that would be the best way to get change,” he said. “I never believed that.”

The reason he criticized President Bush, he explained, was that “I thought it was important after Tiananmen Square [China’s 1989 crackdown on pro-democracy demonstrations] that the United States be clear, unambiguous and firm.”

But, Clinton said, “I never criticized any president for going to China.” In fact, there were no presidential trips to China in the 1990-92 period when Clinton was campaigning for the White House. His own upcoming trip will be the first by an American president to China since the Tiananmen massacre, in which it is estimated that hundreds, perhaps more than 1,000, people were killed during an army crackdown on demonstrations for democracy.

Seeking to explain why his approach toward dealing with China has changed, Clinton reflected, “I would say that it may be just the passage of time.” But he noted that he was making his trip to China “at a time when there have been substantive changes which justify the kind of measured, principled engagement strategy we’ve followed.”

“The reason I’m going to China now is that I think there have been a lot of positive changes in the past six years,” the president asserted.

The president emphasized that the Japanese should not feel slighted by his decision to visit only China on this trip. “I have been to Japan on more than one occasion when I have been president, and I intend to go to Japan again before I leave office,” Clinton said.

He said he decided to go to China this month because U.S. Ambassador to Beijing James R. Sasser and other administration officials strongly recommended that he do so and because his summit in Washington in October with Chinese President Jiang Zemin had gone so well.

The president praised China for cooperating with the United States over the past few weeks after first India and then Pakistan carried out a series of nuclear tests.

“You can’t imagine any scenario in which we can unravel the difficulties between India and Pakistan without China playing a major role,” Clinton said.

Indian officials have complained that China helped create the atmosphere that led to its nuclear tests because Chinese officials have over the years provided help for Pakistan’s nuclear program.

But Clinton on Friday brushed off the Indian complaints. China’s help for Pakistan “has its roots in the war the Chinese fought with India over 35 years ago,” the president asserted. “And so China quite rationally, from its point of view, developed a security relationship with Pakistan.”

Clinton said he was also grateful to China for the role it has played during the Asian financial crisis.

Chinese officials “have been taking extraordinary actions to avoid devaluation” of China’s currency, the yuan, Clinton said. “And I think in so doing they have helped to contain and to stabilize the situation in Asia.

As for Japan’s role in the recent financial turmoil, Clinton said he was not sure what could be done to persuade the Japanese people to spend more money.

“I don’t know,” he admitted. “But I think that in order to get them [the Japanese] to change their well-known habits for incredible savings, even when it’s not the right thing to do, they have to first of all have confidence in the long-term security and stability of the Japanese economy.”

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